Senate committee approves bill to let counties use existing funds, expand middle‑income housing tax credit

DENVER — The Senate Local Government and Housing Committee on Thursday voted 4–3 to send Senate Bill 1 to the Committee of the Whole after adopting four amendments that backers say increase local flexibility to finance workforce and middle‑income rental housing.

Senator Roberts, the bill sponsor, told the committee that "Senate bill 1 gives counties additional flexibility to address the housing needs" by allowing boards of county commissioners "to use existing county funds to support workforce housing initiatives and local housing authorities" and by strengthening the middle‑income housing tax credit to attract private investment.

The bill as amended lets counties sell surplus real property for housing purposes, permits lease‑purchase financing and long‑term leasehold agreements, clarifies timing and consolidation rules for multi‑jurisdictional housing authority elections, and extends sales‑and‑use tax exemptions for construction materials to workforce housing projects. Several of those changes were developed with the Colorado Municipal League and other local partners, the sponsor said.

Thomas Brian, executive director and CEO of the Colorado Housing and Finance Authority (CHFA), testified in support in an "amend" position and urged technical corrections to preserve the MiHTC's transferable structure for governmental and quasi‑governmental owners. Brian said the middle‑income housing tax credit (MiHTC) supports rental units serving households roughly between 80% and 120% of area median income — and up to 140% in higher‑cost mountain communities — and that the credit is used to lower rents through developer financing.

"MiHTC is innovative and it's the first of its kind in the nation," Brian said, urging the committee to adopt clarifying language on recapture provisions and transfers so investors and governmental owners retain appropriate accountability.

Not all testimony was supportive. Tila Forhand, a constituent from Silt who identified herself as a finance professional, testified in opposition. "I oppose Senate Bill 26001 because it creates a major policy shift without clear checks and balances to ensure it works as intended," she said, urging measurable outcomes, independent oversight and off‑ramps to protect taxpayers and county budgets.

Several committee members pressed witnesses on technical points. Senator Liston asked whether investors who buy tax credits without ownership could be held liable if a project later fails to meet program requirements; Brian said the Department of Revenue oversees recapture and that investors can become responsible if credits are recaptured. On renters' benefits, Brian said the credit is allocated to projects and used by developers to lower rents rather than distributed directly to tenants.

Local government representatives emphasized the rising cost of housing development and the need for flexible financing. Tamara Pogue, a Summit County commissioner, said SB1 would let counties treat affordable housing like other infrastructure and cited a local project that rose from an estimated $55,000,000 in December 2024 to more than $80,000,000 by March 2025.

Bev Staples of the Colorado Municipal League told the committee that housing was the top concern in CML's survey and said SB1 reduces statutory red tape. Andrew Armstrong, testifying for Summit County, said the bill would clarify county authority under Colorado Revised Statute 30‑11‑107 and make it easier for counties, lenders and bond counsel to finance projects.

Votes at a glance: - Amendment L001 (allows sale of public real property for housing): adopted by roll call, 4–3. - Amendment L002 (permits lease‑purchase financing and leasehold agreements): adopted by roll call, 4–3. - Amendment L003 (election timing and consolidation for multi‑jurisdictional housing authorities): adopted by voice, no objection. - Amendment L004 (sales & use tax exemption for construction materials for workforce housing): adopted by voice, no objection. - Final committee recommendation: SB1, as amended, advanced to the Committee of the Whole on a roll‑call vote of 4–3.

Opponents on the committee voiced constitutional or philosophical objections to government involvement in housing finance and concerns that authorizing counties to use general fund dollars could compete with schools or roads; supporters emphasized the bill is voluntary and framed it as local control. Several witnesses and local government groups asked for early collaboration on implementation details and clearer fiscal analysis of downstream costs.

The bill's next procedural step is consideration by the Committee of the Whole; sponsor and CHFA indicated more technical language related to recapture and transfers could be proposed on second reading.